Yahoo Finance Editas Medicine, Inc. (NASDAQ:EDIT) Reported Earnings Last Week And Analysts Are Already Upgrading Their Estimates
Editas Medicine, Inc. (NASDAQ:EDIT) just released its latest full-year results and things are looking bullish. Revenues of US$78m beat estimates by a substantial 177% margin. Unfortunately, Editas Medicine also reported a statutory loss of US$2.02 per share, which at least was smaller than the analysts expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Check out our latest analysis for Editas Medicine
Taking into account the latest results, the current consensus, from the 17 analysts covering Editas Medicine, is for revenues of US$31.2m in 2024. This implies a disturbing 60% reduction in Editas Medicine's revenue over the past 12 months. Per-share losses are expected to explode, reaching US$2.48 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$23.0m and losses of US$2.41 per share in 2024. Ergo, there's been a clear change in sentiment, with the analysts lifting this year's revenue estimates, while at the same time increasing their loss per share numbers to reflect the cost of achieving this growth.
The consensus price target stayed unchanged at US$15.40, seeming to suggest that higher forecast losses are not expected to have a long term impact on the valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Editas Medicine analyst has a price target of US$27.00 per share, while the most pessimistic values it at US$7.00. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Editas Medicine's past performance and to peers in the same industry. We would highlight that revenue is expected to reverse, with a forecast 60% annualised decline to the end of 2024. That is a notable change from historical growth of 0.4% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 17% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Editas Medicine is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Editas Medicine going out to 2026, and you can see them free on our platform here.
Plus, you should also learn about the 3 warning signs we've spotted with Editas Medicine .
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
